Betting on climate change

“The more unpredictable the world, the more we rely on predictions” (Steve Rivkin). The uncertainty of an unknown future imposes costs and risks on us in many areas of life. A cereal-growing farmer risks a big financial loss if the price of grain is low at harvest time, and a livestock farmer may not be able to afford to feed his herd if the price of grain goes up. One way to reduce the risk is to hedge against it in a futures market. The two farmers can enter a forward contract, for one to deliver a set quantity of grain to the other for a fixed price at a future date. And indeed farmers do routinely use futures contracts to reduce their risks.

Weather is a major uncertainty affecting our futures (it is one of the main sources of risk for those farmers), and weather futures markets can be used to hedge on the monthly/seasonal time scale. In the longer term, changes in climate will also bring a range of costs and benefits, and a market in climate futures would allow anyone who is vulnerable to hedge against these risks too. But how can we assign fair prices to the contracts? One obvious starting point would be to look at model predictions and historical data. This is essentially what the IPCC does, eg with its estimate of 0.3+-0.1C /decade for anthropogenically-forced warming over the next 20 years in the absence of substantial mitigation of emissions (at the “likely” level, ie 66%-90% probability). If we want to work out the probability of global mean temperature being warmer 20 years from now, we could take this 0.1C in uncertainty of anthropogenic forcing (which I will assume to be 1 standard deviation of a Gaussian deviate), and add another 0.15C of independent natural internal variability, which gives a combined estimate of 0.3+-0.18C warmer overall or about a 5% chance of cooling. To this, we can add perhaps another 5% due to the possibility of a large volcanic eruption at the right time, making 10% in total. Now before you all write in telling me my assumptions are wrong, the real answer should be 20%, or 4%…that’s precisely my point. Of course my simplistic assumptions can be questioned, and I could have performed a more accurate calculation, but however carefully it is approached, this sort of forecasting inevitably involves subjective judgement and assumptions. The IPCC estimate depended on expert judgement, so someone who believed that they markedly overstated the anthropogenic influence might deduce that the chances of cooling were closer to 50%, and an advocate of the more extreme solar forcing theories might even confidently predict significant global cooling. So ultimately it seems like we have no really firm, provably correct and objective basis for setting a market price.

Fortunately, there is a solution to this problem. Efficient market theory states that the price in a free market should accurately reflect the aggregated information that is available, and so in 1990 economist Robin Hanson noted that we can turn the problem around: use the market as an aggregation mechanism to tell us what the odds are on any particular event. This, he claims, could be much more effective than relying on panels of government- (or self-)appointed experts and media pundits to predict the future, since the financial penalty would keep the incompetent away from the marketplace, and the real experts would be automatically rewarded for correcting any errors in the market prices. There is now a growing body of evidence in support of these theories, including for example the analysis of existing markets and results from a market which was set up specifically to investigate the idea further. Of course the market price does not exist in a vacuum: in practice, traders would perform calculations as I did above (but rather more carefully), and the market price would reflect their consensus. The market is a highly inclusive mechanism: rather than having to debate to the death, anyone who has an opinion can invest as much as they want (which will relate to their confidence), and in the long run the winners will drive out the losers. If I offer (and accept) bets on global cooling at 10:1 based on my rough calculation, someone who does a better job of estimation will probably be able to take money off me, earning a reward for their skill and effort.

The Foresight Exchange market is an internet-based game which runs an ideas futures market, covering a wide range of claims including a number of environmental issues. The basic betting mechanism is based on the concept of a pair of coupons labelled “Yes, claim X is true” and “No, claim X is false” (where X is a proposition whose truth is not yet known). These coupons can be bought and sold individually on the open market, and a pair of them can always be bought or redeemed for $1 from the bank. When the claim’s truth is determined, the correct coupon is redeemed for $1 and the false coupon becomes worthless. The market price of the Y coupon is the market’s estimate of the probability of the claim being ultimately proved true. Here are a couple of examples – indicating how confidently (or otherwise) the market predicted the re-elections of Clinton and Bush in 1996 and 2004 respectively.

The Foresight Exchange is a small market with a limited number of players, and is certainly not perfect – I presented a simple analysis in a poster at the EGU in April, and I have also discussed a couple of claims in more detail here and here. (These are a slightly different type of claim, where the payout of the Y coupon depends continuously on the value of a variable at a specified future time – such as the global mean temperature in 2030. The N coupon pays $1-Y as before.) As Hanson’s theory predicts, by participating in the game, I have both improved the price on these claims (increasing market skill) and simultaneously increased my wealth (received a reward for my contribution). Although this small and non-serious market has noticeable inefficiency, a real money market could certainly hope to do better. So what are the drawbacks? It seems that there are are surprisingly few. Fears that rich vested interests could rig the market are generally misplaced: it would cost them a lot of money to do so, potentially much more than the price of influencing a few high-ranking experts. Robin Hanson’s pages have a great deal of discussion about the various criticisms of the idea that have been offered, and also how the basic idea could be extended to cover a wide range of applications.

I’ve recently been trying to establish consensus on the subject of global temperature rise, by arranging bets with sceptics who claim that the IPCC TAR is overly alarmist. Richard Lindzen was the first I noted who forecast here that over the next 20 years, the climate is as likely to cool as warm, and said he would be prepared to bet on it. However, when challenged to a bet, it turns out that he expects odds of 50:1 in his favour, ie he will only bet on the chances of cooling being at the 2% level or higher, far short of his 50% claim. My quick and dirty estimate above based on the IPCC TAR suggests that they would put the probability at more like 10%, so his offer actually appears to affirm the IPCC position. He also suggested an alternative bet (see here for my comments on this article) based on the amount of warming: >0.4C warmer and I win $5,000, <0.2c and he wins $10,000. Again, no-one who believes the IPCC summary would find his offer attractive, since it has negative expected value. The chances of winning and losing are roughly equal, so there does not appear to be any possible justification for his expectation of a 2:1 ratio (in his favour) in the stakes. In both cases, in contrast to his words, his position seems to be more alarmist than the IPCC!

The list of sceptics who have refused to bet against the IPCC position has grown steadily since then, and now also includes Michaels, Jaworowski, Corbyn, Ebell, Kininmonth, Mashnich and Idso (all my blog posts and related comments are linked from here). While I would be happy to take money off any or all of them, there is more to this than sceptic-bashing and a few high-profile bets – it could also perhaps result in a working market that would generate a true consensus and, furthermore, provide the socially and economically valuable function of allowing the vulnerable to hedge against risks.

[2005/06/24: comments on this post are now closed. This post generated a record number of comments: thanks to all those who commented. For any further follow up, you are recommended to the discussion on the newsgroup sci.environment – William]

125 Responses to “Betting on climate change”

And with the above post, Eli brings this thread full circle in the context of betting: will someone put their money where they think the reasonable proof is? Thanks for that focus, Eli.

So, can we structure the bet around these levels of proof [saaaay…where’d Bahner go?]?

And, a related topic to these bets and levels of proof is policy. Policy-makers ‘bet’ on whether the proof is good enough by making policy, and they use different ways of knowing that are not all “Science” – experience, judgement, hunch, etc.

Our job is to make climate levels of proof understandable for policy-makers who do not always use science in their decision-making.

A bet is an understandable way to demonstrate probabilities to the public and non-scientist. The use of U.S. legal standards is also a useful construct (Eli Rabett #100) to translate a complex topic. However the way things work in science (once my field) and in law (my current field) are very different. Science is about collecting data and interpreting data to find factual information. The legal system, especially in courtroom situations, is about persuading people to your viewpoint, sometimes even if facts contradict your viewpoint.

The way lawyers try to change juries’ perceptions is very much like the way politicians, lobbyists and public relation types try to change the public’s perceptions. There is a public relation/political campaign machine pushing the skeptic viewpoint. I realized this in after reading RealClimate motivated me to do some research on the politics of the science.

On the political side anthropogenic climate change (ACC) is promoted as a belief of environmentalist types. All environmentalists are cast as extremists and alarmists, and so the idea of ACC must also be extremist and alarmist, but not scientific fact.
The politically motivated skeptics also questioned the science. First the position was there is no evidence. When evidence for ACC was produced their position became there might be some evidence but it is uncertain and is overruled by other causes. There is a newer tactic that I have seen on TCS and other sites to admit there is evidence but to denounce all of the evidence pointing to ACC as promoting unrealistic catastrophic ACC.
A common theme of extremism/alarmism is prominent in the skeptic arguments. R. T. Pierrehumbert notices this also (#85). The conclusion of these arguments is no political action should be based on extremism or alarmism so no climate change regulations should be made.

Michaels accepting the low IPCC projection does not surprise me. The skeptics have been careful to change their position as the science information has changed. The idea is to question the science but in a plausible way. The skeptics can’t completely reject the science when the evidence is overwhelming (they would lose credibility), but also don’t want to be seen as embracing the science (this could be used to promote regulation). This is a common rhetoric trick. You first present yourself as trustworthy and unbiased then promote your biased viewpoint. Even used-car salesmen do this by first saying they don’t care if you buy a car but then start to urge you to buy a car.

RE #100, glad you brought in the judicial perspective. I’ve been following the “medical model.” The doctor does not say to the patient, “there is only 94% certainty that the lump is cancerous, so we’ll wait & see if it gets to 95% certainty before considering an operation.” I started reducing my GHGs in 1990, way before the first studies started coming in with 95% certainty on AGW in 1995. That’s the only reasonable, moral, logical, correct response (unless you’re a CEO of Exxon; & even Dick Cheney is into alternative energy). I started with efficiency & conservation that did not reduce my living standard (actually increased in a couple of areas), and was able to reduce 1/3 to 1/2, & now am on 100% wind power, and saving $1 per month over conventional energy.

If one follows the link William provided in his response to #92 one finds three pictures collectively labeled “figure 9.8.” The bottom left-hand corner of the uppermost picture seems to indicate that the IPCC anticipates ground-level warming in the interior of Antarctica will indeed exceed the global average.

[Response:Err, no: if you look at that piccy you’ll clearly see that the warming in the NH north of 30N exceeds that in Antarctica. The warming shown in that pic for Antarctica is between 1-2 degrees over most of it, and I can’t see how you manage to interpret that as more than the global average. Even the warming right at 90S (just over 2 oC) isn’t clearly greater than the global average, and is probably less – William]

It also confirms my prior belief that temperature increases in this region are predicted to be significantly higher than in equatorial regions, but only at ground level in the interior of the continent.

The response appended to #90 asserts that “the models don’t show a great deal of warming there” (in the world’s driest, coldest climates). With regard to Antarctica this appears to be a true statement only if one looks at temperatures throughout the entire troposphere, apparently because the oceans surrounding the continent efficiently soak up a lot of excessive global heat. To that extent, I was clearly mistaken and I stand corrected.

But the response in #90 is clearly false if one looks only at ground-level temperatures in the interior of the continent.

The IPCC link also points out that excessive warming in the northern arctic regions “is connected with a reduction in the snow and sea-ice cover.” Obviously, snow and ice would melt in response to warming regardless of the reason for that warming. This melting and the resulting increase in temperatures it causes in the future does not provide any evidence that the initial warming and melting was caused by greenhouse gasses.

Since the IPCC seems to be saying that excessive future warming in northern arctic regions will largely be a result of ice melt, future temperature changes in that region do not seem particularly useful for identifying anthropogenic influences. In my estimation, the best candidate region for that purpose remains the portion of Antarctica in which the IPCC models predict significant warming.

Based on this information, I suggest the wager I proposed in #68 could be settled by referring strictly to ground-based temperature readings in the Antarctic interior. If the average annual temperatures in this area during any consecutive 50 year period (excluding years of volcanic and El Nino events) are plotted against atmospheric GHG concentrations and a least-squares trend line fitted to this data has a value of r-squared exceeding 50%, I will have to concede defeat.

You assert that “The skeptics have been careful to change their position as the science information has changed.” What do scientists do when scientific information changes? They do the same thing. It is an admirable thing to do, yet you imply the opposite. Astonishing.

You claim there is a public relation/political campaign machine pushing the skeptic’s viewpoint. There is also heavily-financed campaign machine pushing the environmentalist/alarmist viewpoint. It is being pushed by people whose future incomes are dependent on convincing the general public that dangerous amounts of anthropogenic global warming will occur in the future.

The groups whose incomes depend most heavily on successfully promoting this belief are employees of environmentalist institutions, climatologists who derive income from government grants, and a very large number of politicians and bureaucrats.

If we are to dismiss the arguments of skeptics because they receive income from institutions that want to advertise a certain viewpoint then, for exactly the same reason, we must reject the views of most climatologists.

Re #104: In this case the skeptics are like doctors who advise “There is only a 50% chance the lump in your head is malignant rather than benign, and there is a 90% chance you will be severely disabled if we attempt to remove it.”

When I say “benign” I am referring to the fact that global warming will save a large number of people who will otherwise die of frostbite, hypothermia or malnutrition.

Re: 106 and the “astonishing” comment. At what point, do self-described skeptics then discard the word “skeptic”?

And:
The groups whose incomes depend most heavily on successfully promoting this belief are employees of environmentalist institutions, climatologists who derive income from government grants, and a very large number of politicians and bureaucrats.

“You claim there is a public relation/political campaign machine pushing the skeptic’s viewpoint. There is also heavily-financed campaign machine pushing the environmentalist/alarmist viewpoint. It is being pushed by people whose future incomes are dependent on convincing the general public that dangerous amounts of anthropogenic global warming will occur in the future.”

Firstly, whilst I don’t have any figures, I am somewhat dubious that ‘environmentalists’ have a larger budget going into the global warming debate than the skeptics (i.e. industry).

Secondly, climatologists derive their income from being climatologists. Their income is not dependent upon persuading the general public about anything. There were climatologists before global warming and there will be climatologsts regardless of what happens to the climate in the future. In addition I happen to know a few of the figures involved in the global warming debate (I’m in grad school in the palaeoclimate world). Your implication that the research they produce is coloured by the neccesity to earn money is flat out wrong. End. Of. Story.

r.e. post #104

“When I say “benign” I am referring to the fact that global warming will save a large number of people who will otherwise die of frostbite, hypothermia or malnutrition.”

Hmm, potentially saved by global warming? The odd inuit. Potentially killed by global warming? The vast number of people who live in coastal regions around the world.

“When I say “benign” I am referring to the fact that global warming will save a large number of people who will otherwise die of frostbite, hypothermia or malnutrition.”

How about the millions who will die as a result of HYPERthermia and related problems?

As for your prediction that fewer will die as a result of malnutrition, that is incorrect. Loss of arable land as a result of climate change (due to desertification) and suburban sprawl will significantly reduce the food supply for this planet, which is calamitous, since the population continues to explode. As a result, there will be far fewer people able to eat enough to survive, causing massive loss of life and desparation (resulting in greater violence).

Like the illustrious Mark Bahner, I now have a global warming bet offer at Longbets.org., although unlike Mr. Bahner, my bet is open to anyone who wants to take me up on it.

My bet is that the IPCC TAR is more likely to be correct over the next 20 years than Richard Lindzen. Choosing a change of .3 degrees Celsius for the IPCC over 20 years as compared to Lindzen’s no change, the mid-point between the two positions, and my bet offer, is that temperatures will increase at least .15 degrees Celsius.

Keep in mind these stats are for England and Wales alone. Not only is the odd iniut not included in those numbers, but neither is the rest of the world. FWIW, I believe the Scandanavian nations have an excess winter mortality rate of about half of England’s, so one could start counting from there.

Re#111 – You’re starting to sound like Paul Ehrlich. You also seem to imply the world’s population and resources are going to go drastically beyond some sustainable limit and then suddenly snap like the stock market back in ’99. More realistically, the ties between population, agriculture, violence, etc, would likely contend with each other towards some end rather than overshoot the end and erupt into chaos.

Can you (or someone else) tell me which areas will suffer desertification in this warmer (and supposedly wetter) world so that I can plan accordingly? I particularly would like to buy some large tracks of arable land for agricultural use. I can wall it up to protect it from suburban sprawl and the oncoming violence. The last I checked, the GCMs had strongly confliction information on which areas would be wetter than today and which ones would be drier, particularly when it came to the extremes (desertification vs widespread flooding).

I did not imply that changing one’s position is bad. Frankly I admire the politically motivated skeptics for their ability to run an extremely effective public relations/political campaign, even though I do not approve of their goals or their machiavellian methods.

What I think is interesting is how the skeptics changed. At first they said anthropogenic climate change (ACC) was nonsense with no basis in fact. As this position started to publicly lose traction, they changed to there might be evidence but it is very uncertain (uncertainty is a major theme). Now that evidence supporting ACC is getting stronger they have imported a tactic that they were already using. They know that the public is put off by extremism so they cast their opponents and their positions as extremist. They now portray the evidence that supports ACC as alarmism/extremism/catastrophism. In the legal/political world such attacks are a sign that the facts are not on someone’s side, so they use methods to move the discussion away from the facts and instead disparage their opponents to reduce public credibility.

It is not just my claim that the skeptics are running a public relations/political campaign. It is a fact. Such campaigns have always been a part of environmental politics. What is noteworthy is how sophisticated, well-funded and negative the campaign is and how the skeptic campaign targets not just environmentalists but science and scientists. The driving forces behind this campaign are industries that could lose financially and political conservatives.

There is not anything like the skeptics campaign on the other side of the issue.
Environmental groups are campaigning but they don’t have the money, the unquestioning support of some major media outlets and do not use the same negative tactics like the skeptics. Environmental groups are openly political and freely admit this while many of the organizations that support the skeptics present themselves as independent academic institutions but really are industry/conservative lobbying groups.
In government the bureaucrats (I was once one of them) do not stand to personally gain from regulations. Climate change regulations just means more work for agencies that are already understaffed and under funded. More regulations could result in more science grants, but climatologists are not just out to get more grants.
Such accusations by the skeptics are a rhetoric tactic that tries to cover up their actions by falsely blaming the other side. It’s like arguing kids saying “I know you are but what am I”.

I am also not dismissing the skeptics’ argument just because they receive funding from institutions that want to advance a viewpoint. The questions are what is their viewpoint, why do they advance it and how they are advancing their viewpoint.
The politically motivated skeptic viewpoint is they do not want a new regulatory scheme for financial or ideological reasons. There is nothing wrong with this position and I agree that complex regulations should be avoided if possible. The scientific consensus about anthropogenic climate change does support some kind of action and that action would really have to be a new regulatory scheme. In environmental politics in the past industry/conservatives lost on the science side and that led to their political defeats. Realizing this they decided to go after the science in the climate change debate.

Questioning science that backs policy is a good thing. The best scientific knowledge should be used to formulate policies. How someone questions the science is the key question. Honest questions about the accuracy of science are good, but disparaging valid science just because someone does not like the political implications is not. Much of the material that Michaels and other politically motivated skeptics present to the public has dubious scientific value and is really just political attacks. That is why I question their claims.

I am not a climate scientist, but it seems to me that there are a couple of serious problems with your wager. The most glaring is that climate science predicts that there are positive feedbacks that result from anthropogenic warming. So do we attribute the increases in temperature that are due to these positive feedbacks to anthropogenic factors? Of course, logically we must. Without the anthropogenic kick-start, they would not occur. However, your r-squared method does not account for this, and you could actually win the bet precisely because these positive feedbacks occur as predicted.

The other problem is one of time slices in your r-squared. How frequently are you testing global temperature, and how frequently is it reasonable to test to develop a trend line. The shorter the time scales the greater a role will be played by natural variability, ENSO, etc.

Re #115 – I agree there are a multitude of feedbacks, both positive and negative. But I don’t think it’s logical to say “Without the anthropogenic kick-start, they would not occur.” Something started the current warming, but it wasn’t necessarily humans. As others have pointed out (in #102 for example), the cause of the warming that kick-started the whole cycle cannot necessarily be blamed on mankind.

With regard to your question about time scales, my proposal is that temperatures should be graphed as a function of atmospheric greenhouse gas concentrations, not as a function of time. I think that should prevent the problem you pointed out.

Re #110, which says “Your implication that the research they produce is coloured by the neccesity to earn money is flat out wrong. End. Of. Story.” I will be happy to concede this point, just as quickly as the rest of you concede that the same statement applies to scientists working at Exxon.

Or maybe, based on the rather shocking anecdotal evidence in this link, I should not be so hasty to concede this point.

RE #107 (ref to #104), the medical analogy breaks down in that surgery costs money & could be risky. Energy & resource efficiency & conservation, and some alternative energy (esp. when subsidies to fossil fuels are eliminated or a level playing field is allowed) $AVE MONEY, & strengthen the economy. And they also reduce many other harms: local pollution (ground, water, air), regional pollution (acid rain), ozone depletion, reliance on foreign energy, military costs/losses associated with such, resource depletion. Many smaller, efficient cars are not only safer for those inside the car (see DOT info), but also make roads safer for all. Bicycling & walking (to offset a few auto trips) are good for the health & spirit, reduce crime, cause less wear & tear on roads, saving taxes. Unfortunately I had to give up my bike when we moved to a place not good for cycling. People with a generous spirit can find thousands of things to do to reduce GW, and save money to boot. If some are not feasible to some people, there are many other things to do.

Reduction in GHGs entails not only reducing energy, but all other resources & products that entail energy consumption, including water, esp. hot water. For instance, a low-flow showerhead, costing $6, can save $2000 over its 20 year lifetime in water & heating it. Following REDUCE, REUSE, & RECYCLE principles can save money and save the environment, without lowering living standards or our economy. In fact, these could even improve our economy (see Amory Lovins’s works, NATURAL CAPITALISM, natcap.org, and rmi.org). As Hunter Lovins (Amory’s wife & partner) says, “The national energy policy comes down to the cracks around your windows,” and “the poor can’t afford to be energy inefficient and wasteful.”

My approach is a win-win-win-win game. We need not continue to play the GW lose-lose-lose-lose game (with perhaps a few lives saved from reducing cold, against many more lost.

RE malnutrition, the experts say GW will cause net loss in world agricultural output. For instance, while plants do better in a CO2 enriched world, weeds greatly outstrip food crops, and food crops are less nutritious, causing insects to eat more. The result is greater loss of crops. They did an experiment, and the results actually surprised them. If you add in water problems & high heat & other weather problems associated with GW, the loss will be much greater. There may be some crop increase in some places, but the world output is slated to decrease.

There is also the possibility of very serious problems, with tremendous lost of life; even if this is only 5%, why should we risk it when abating GW (even if GW were not happening) is such a good thing in so many ways, as outlined above. If I had not reduced my GHGs with such success, I perhaps wouldn’t be so sure, but I am totally, 100% certain on this! Remember our roots: Ben Franklin said, “A penny saved is a penny earned.”

Don’t listen to those anti-American people at TCS. They would have us get into such trouble with GW, that severe regs would have to be imposed, and we’d have to suffer under a totalitarian regime. May I suggest reading THE GALILEO SYNDROME, a futuristic novel about a world that refused to abate GW. We shouldn’t want to risk material harm by letting GW get out of hand, and we shouldn’t want to risk losing our democratic freedoms.

I was being somewhat flippant with my Inuit remarks. Of course people, especially old people, die because of the cold. On the other hand, they also die because of excessive heat – take the recent warm summer (2003?) that knocked off so many old people in France. A warmer climate means more summers like that one – I recently read that such summers would be the norm come 2040.

Compared to the potential deaths from drought, coastal flooding etc, I doubt that reducing the deaths from cold in the winter would make much of a dent on this toll. Hence my flippancy.

As an aside, I wonder if the UK winter fuel allowance has cut into deaths during winter?

Joel,
Saying that natural causes could also kick-start positive feedbacks in no way refutes my first point. The bottom line is that the bet you are proposing assumes that climatologists expect a linear relationship between GHG concentration and temperature (excluding natural factors), and this is not what anyone is forecasting. So, again, temperatures and GHG concentrations could both match their forecasts pretty closely and, because of positive feedbacks, they could still lose the r-squared bet to you.

Your second point I don’t quite follow, but maybe it is me. Aren’t you sampling correlation between GHG concentration and temperature over time? Annually? Monthly? Once per decade? The frequency of observations will of course affect the value calculated for r-squared, and my guess is that the more frequent the data-points, the lower the correlation you are likely to see because for shorter time-scales, the change in temperature is far less likely due to GHG concentrations than for longer timescales.

William Connolley and James Annan have repeatedly asked me whether I will accept “James Annan’s bet.”

For those who don’t know the history, I proposed (and James Annan accepted) a bet on the atmospheric CO2 concentration that is the year 2030 “midpoint” in the IPCC TAR’s analysis: 438 ppm. If the IPCC TAR is to be believed, there is about a 50/50 chance that the CO2 concentration in 2030 will be above 438 ppm. I offered James Annan $25 if the concentration in 2030 was above 438 ppm, where he would only have to pay $1 if the concentration was below 438 ppm. In other words, I offered 25-to-1 odds on what should be an even-money bet.

After accepting the 25-to-1 odds on the $1 bet, James Annan proposed that he should also get 25-to-1 odds on a $100 bet. If the concentration was above 438 ppm, I’d give him $2500, if the concentration was below 438 ppm, he’d give me $100.

Of course I’m not interested.

Since the “offer” itself seems to reflect a lack of understanding of basic economics, let me explain. James Annan’s offer can be viewed in two ways, which both produce the same basic answer (that the offer is a farce):

1) The worth of the bet to me is equal to the likelihood I’ll win times the amount I’d win, minus the likelihood I’ll lose times the amount I’ll lose. Since the likelihood I’ll win is 24/25 and the likelihood I’ll lose is 1/25, the value to me of James Annan’s proposed bet is = (24/25 * $100) – (1/25 * $2500) = -$5. (Note: The value of the bet in which I give James Annan $25 to his $1 is also negative to me. But I made the offer to prove a point, not to win money.)

2) Another way to look at the bet is as an investment. James Annan is offering me a 96% chance that I’ll win 4% “interest” (i.e. $100) on my “principal” of $2500 dollars. But there’s a 1 in 25 chance that I’ll lose my entire principal.

Have James Annan and William Connolley ever made an “investment” where they could earn at most 4% interest on the investment, but had a 1-in-25 chance of losing the entire principal? If not, why–other than possible complete ignorance of basic economics–would they make the “offer” to me?

But just to show I have no hard feelings about James Annan’s insulting “offer” I have the following two counter-offers:

1) James, I’ll be happy to bet you an extra $25 at even money. In other words, if the concentration is below 438 ppm, you owe me $26 ($1 from the original bet, plus $25 from this new offer), but if the concentration is above 438 ppm, I’ll owe you $50. I’m sure, since you think the IPCC TAR’s projections are accurate, you’ll be happy to accept this new offer. ;-)

2) But I’ve got an even better offer for you both…a New and Improved Free Money Offer. I have boosted my offer to an incredible $8 per IPCC TAR author’s vote on my bet #181 on Long Bets (that my projections are more accurate than the IPCC TAR’s). That’s for up to a maximum of $200 (25 votes). I can’t think of any reason why y’all would refuse this offer. You can bet *I* wouldn’t, if y’all made the offer to me!

[Response:Oh dear. Mark, the reason we won’t even bother read your new and improved offer is that you keep weaselling out. You offered a bet, at certain odds, and now you say that at those odds you expect to lose money so you don’t want to take it up. So it was a silly bet to start with. To those interested in this further: you are advised to follow it up on the newsgroup sci.environment – William]

“There is not anything like the skeptics campaign on the other side of the issue. Environmental groups are campaigning but they don’t have the money, the unquestioning support of some major media outlets and do not use the same negative tactics like the skeptics.”

You’re kidding right?

We are trying to sway the center in this debate (think of them as the jury), so credibility is very important. Obviously counter-factual assertions like this just alienate people who are potentially persuadable.

As I’ve posted elsewhere, the “excess summer deaths” in all of Europe in 2003 were roughly that of the typical number of “excess winter deaths” annually in Britain alone. It’s hard to suggest the British could get much more acclimated to cold winters by now. On the other hand, studies have shown that people in US cities have adapted to warming over the past 3+ decades (as I believe I referenced somewhere else on this site). I’ve also linked elsewhere to a study showing that a change of 1 degree C in Britain’s winter equates with 3,500 deaths/lives.

Assuming global warming does increase sea levels, we can adapt to them. We already have in many ways with floodplain construction restrictions, protective barriers, etc. I’m also not sold on the idea that our future warmer and supposedly wetter climate will produce more droughts. Regardless, much of the world is already equipped to handle droughts. Countries which cannot handle droughts have other serious problems at their forefront – disease, potable water and adequate sanitation, etc – which seem likely to take more lives than climate change.

I do not see how the 2003 summer in Europe will be the “norm” in 2004. Temps were well above normal for prolonged periods of time. With the IPCC predicting the almost certain average global temp change by 2040 to be no more than 1-2 degrees from 1990, it’s hard to imagine that the “norm” summer would heat several times above that. That would require the other seasons in 2040 and beyond to be much cooler than 1990 in order to compensate.

Re #119 –
Dan,
You wrote that climate scientists do not believe there is “a linear relationship between GHG concentration and temperature.” I think you are correct, but I also think members of the media and the general public have been led (by alarmists) to believe there is such a linear relationship.

The wager I proposed is an attempt to probe the limits of what climatologists really think they know. Specifically, I am attempting to learn whether the following hypothesis is correct:

Climatologists are in unanimous agreement that the link between greenhouse gasses and climate is so weak that less than half the yearly changes in the earth’s average temperature can be attributed to mankind’s emissions of greenhouse gasses.

I propose to test this hypothesis with the following experiment.

I propose to offer climatologists a wager. The wager will be that they cannot fit a trendline to data consisting of average temperatures plotted as a function of atmospheric GHG concentrations in such a way that the resulting value of r-squared exceeds 50%.

I will make several concessions:

The trend line can be any polynomial of degree three or less, or it can be a exponential, logorithmic, hyperbolic, trigonometric or power function (but it cannot be a mixture of such functions). This should make adequate allowance for any feedbacks that might magnify (or diminish) the effects of GHGs. I think you are contending that these feedbacks might turn a linear function into a more-steeply increasing function such as an exponential. I accept that possibility, which is why I don’t insist on a linear function.

The climatologists may exclude data collected during any 12 month period following a major volcanic eruption or an El Nino event, even though this will make it much harder for me to win the bet because eliminating data from these years will automatically increase the value of r-squared.

The data may be limited to average temperatures in any area of the globe covering at least 1 million contiguous square miles in a roughly circular pattern, and in any continuous size slice of the atmosphere, even though this will make it harder for me to win the bet because climatologists can test hundreds of possibilities looking for the one needle in the haystack that will prove my conjecture wrong.

The temperature data may be collected during any period of each year, so long as the period lasts three months or longer, and so long as the same period is used in every year.

I will accept any number of data points equalling or exceeding 50, so long as they are collected from consistenty reliable and accurate sources during consecutive years (excluding volcanic and El Nino years), and so long as they include the year 2004. Within this limit, any combination of past and future data will do.

The GHG concentration data must be collected from the same general region as the temperature readings but they do not have to be for the same time period. They can be for any constant number of months before or after the temperature readings. This will allow for the possibility that temperature changes lag behind changes in GHG levels.

If no climatologists will agree to offer me even-money on this wager, then my hypothesis cannot be rejected.

What do you think? Would this experiment accurately test the hypothesis? If not, how can I improve it?

[…] into a $10,000 global warming bet with two Russian scientists. (More general info here and here and here.) To decide who wins the bet, the scientists have agreed to compare the average global surface […]